What is the marginal willingness to pay of the consumer

Assignment Help Microeconomics

Reference no: EM131406295

Microeconomic Principles Assignment - Demand and Supply for Widgets:

STEP 1:

Write YOUR demand equation: P_b = 10A - 0.5BQ_d.
Write YOUR supply equation: P_v = C + 0.5DQ_v

STEP 2:

Use the equilibrium definition and set:

P_b = P* = P_v and set Q_b = Q* = Q_v

Substitute P* in your demand equation for the right-hand side of your supply equation.

C + 0.5DQ* = 10A - 0.5BQ*

Solve for the equilibrium quantity Q*.

Substitute the value for Q* into the demand equation to find P*.

1. What is your student number-don't include the @?

2. What is your A?

3. What is your B?

4. What is your C?

5. What is your D?

6. What is your equilibrium price?

7. What is your equilibrium quantity?

8. How much do consumers spend in equilibrium?

9. How much revenue do producers receive in equilibrium?

10. How much consumer surplus is created by this market?

11. How much producer surplus is created by this market?

12. How much total surplus is created by this market?

STEP 3:

Take your equilibrium quantity and multiply it by 1.2-this is Q_H

Take your equilibrium quantity and multiply it by 0.8-this is Q_L

13. What is the marginal willingness to pay of the consumer that buys the Q_Hth unit?

14. What is the marginal cost to the producer who makes the Q_Hth unit?

15. How much surplus would be created by trading the Q_Hth unit?

16. What is the marginal willingness to pay of the consumer that buys the Q_Lth unit?

17. What is the marginal cost to the producer who makes the Q_Lth unit?

18. How much surplus would be created by trading the Q_Lth unit?

19. What is the limit-price for widgets?

20. What is the elasticity of demand for widgets between the equilibrium and limit prices?

21. What is the reservation price for widgets?

22. What is the elasticity of supply between the reservation and equilibrium prices?

23. Is the last digit of your student number (i.e., D) even or odd? If D is even, right the number 2 in your answer form. If not, write 3.

24. If D is even, suppose widgets are a normal good. If D is odd, suppose widgets are an inferior good. How would an increase in income affect the limit-price of widgets? 1 = increase, 2 = decrease, 3 = stays the same, 4 = ambiguous, 5 = no answer.

25. If D is even, suppose Bogs are a substitute for widgets. If D is odd, suppose Bogs are a complement for widgets. How would an increase in the price of Bogs affect the limit price for widgets? 1 = increase, 2 = decrease, 3 = stays the same, 4 = ambiguous, 5 = no answer.

Suppose the demand for widgets stays the same, but a decrease in the cost of production caused by a fall in the price "gets" causes an increase in the supply of widgets. The new supply is P_v = 0.5C + 0.5DQ_v.

26. What is the new equilibrium price of widgets?

27. What is the new equilibrium quantity of widgets?

28. What is the new total surplus in the market for widgets?

Suppose there is a quota, which restricts the production of widgets to Q_max = 0.5Q*; use the original supply equation.

29. What is the change in consumer surplus from the quota compared to the equilibrium?

30. What is the change in producer surplus from the quota compared to the equilibrium?

31. What is the change in total surplus from the quota compared to the equilibrium?

32. What is the dead-weight loss from the quota?

Suppose there is a tax on widgets. The tax is equal to 30% of the equilibrium price P**; use the original supply equation.

33. How much is the tax?

34. What is the after-tax quantity traded Q_T?

35. What is the consumer tax burden?

36. What is the producer tax burden?

37. What is the dead-weight loss of the tax?

38. What is producer surplus at Q_T?

39. What is consumer surplus at Q_T?

40. How much revenue is raised by the tax?

Reference no: EM131406295

Questions Cloud

List dollar amount of debt disney proposed to sell to public : List the dollar amount of debt Disney proposed to sell to the public. Indicate whether this amount has increased or decreased from 2008 to 2010. Discuss some potential causes of this increase or decrease.

What are the major goals of your performance appraisal plan : What type of performance appraisal system do you need to address organizational needs and your organizational vision, mission, philosophy, and goals?What are the major goals of your performance appraisal plan and what issues does it resolve?

Discuss the impetus for health information exchange : HI 300 : Discuss the impetus for health information exchange (HIE) in the United States.Describe basic HIE organizational structures, architectures, and services.Reinforce the need for data stewardship in HIE services.Identify the state, regional, an..

Explain what a risk profile is : 1. Why is it so important to understand the impact that uncertainty has on good decision making 2. Explain what a risk profile is. Why is it important? What four questions might a risk profile answer?

What is the marginal willingness to pay of the consumer : What is the marginal willingness to pay of the consumer that buys the QHth unit? What is the marginal cost to the producer who makes the QHth unit? How much surplus would be created by trading the QHth unit

Leadership strategy or a differentiation strategy : Do you agree that it is hopeless, or can you do SWOT analysis to identify your core competencies and develop a strategy that might yet save the store? Will you choose to implement a cost leadership strategy or a differentiation strategy?

Why did the company enter bankruptcy : If you research a bankruptcy, why did the company enter bankruptcy? What happened or is likely to happen? What are the issues surrounding the bankruptcy?

What is the percent of r-d investment to total revenue : What is the percent of R&D investment to their total revenue? Is this average, above average, or below average within their industry? Does this R&D investment match their product strategy? Explain.

What are the nature and amount of any carryovers : Compute JKEB Corporation's 2012 taxable income and income tax liability before tax credits. What are the nature and amount of any carryovers to 2013? What is the taxable amount due after using the tax credit?

User Account

All Pages